Asian Session Forex Recap – Jan. 4, 2016

  • Chinese Dec Caixin manu PMI down from 48.6 to 48.2 vs. 48.9 forecast
  • New Zealand hit by 5.1 magnitude earthquake
  • Japanese final manu PMI upgraded from 52.5 to 52.6 in Dec
  • Australian Dec commodity prices down 23.3% y/y , -21.8% previous

The comdolls were off to a rough start this forex trading week, as downbeat Chinese PMI and falling commodity prices hit the newswires.

Major Events:

Chinese Caixin manu PMI – In contrast to the government data released last week, the Caixin version of the Chinese manufacturing PMI indicated a sharper contraction for December. The index slipped from 48.6 to 48.2 during the month instead of improving to the projected 48.9 reading.

Chinese equity slide – Following the release of the downbeat Caixin PMI data, the Chinese stock market chalked up a sharp selloff, with the China A50 equity index down by more than 5% for the day. Sound familiar? Better read up on how the Chinese stock market slump affected financial markets last year.

Australian commodity prices – Not much of a surprise here considering how commodity prices suffered a bloodbath towards the end of last year. For the month of December, commodity prices were down 23.3% compared to the same period in 2014, following the 21.8% decline recorded in the previous month.

Major Currency Movers:

AUD & NZD – Unfortunately for the Aussie, the downbeat Chinese PMI, falling equities, the drop in commodity prices turned out to be a triple-whammy. The selloff also carried over to the Kiwi because of New Zealand’s close trade ties to the Land Down Under.

AUD/USD is down 66 pips to .7219 (-0.90%), AUD/JPY is down 145 pips to 86.13 (-1.65%), NZD/USD is down 84 pips to .6759 (-1.23%), NZD/JPY is down 136 pips to 80.67 (-1.66%), and AUD/NZD is up 16 pips to 1.0678 (+0.15%).

USD – Talk about a manic Monday! The Greenback scored some pips on the early rout of risk aversion but gave back most of these intraday gains to the European currencies.

EUR/USD dipped to a low of 1.0824 then climbed back above 1.0900 (+0.15%), GBP/USD found support around the 1.4700 handle and is up 10 pips to 1.4743 (+0.06%), and USD/CHF popped up to a high of 1.0246 then retreated to .9943 (-0.51%).

Watch Out For:

  • 8:00 am GMT: German preliminary CPI (0.2% expected, 0.1% previous)
  • 8:15 am GMT: Spanish manufacturing PMI (53.1 expected, 53.1 previous)
  • 9:30 am GMT: U.K. manufacturing PMI (52.8 expected, 52.7 previous)

See more:

U.S. Session Forex Recap

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